I am doing the level 2 manual book keeping course at the moment, and stuck on the above two tasks. I am using sage line 50 and I shall be most grateful if any one can provide help to the following -
1. When entering payments in the petty cash account, how can I tell if an item is vatable or not?
2. What is the reason for using journals? How and when do you use them? What codes or nominal codes do I use?
1) In order to claim VAT on a payment you have to have a VAT receipt with a VAT number on it. There are things that are not vatable such as stamps for example, amongst a whole host of other items. Check the Inland Revenue Website if you are unsure on anything that you think is or is not vatable. Unfortunately learning what is and what isnt is a long process and comes with experience.
2) I tend to use Journals for making adjustments and you can use pretty much all nominal codes except for the Debtors and Creditors Accounts (Sales Ledger and Purchase Ledger) and also stay clear form adjusting the VAT accounts.
Sage will tell you if you cant use the selected nominal when using Journals.
Journals can be used for example when an Accountant gives you opening Balance Adjustments to post or perhaps you want to move an expenses or income from one code to another.
You can also use Journals for posting Payroll entries if you dont use the link from sage payroll. for example the accountant does the Payroll and gives you the journal to post.
